I did something yesterday I’ve been thinking about doing for about three years. I filed to incorporate our investment portfolio into a limited-liability company (LLC). Brilliance Equity, LLC (BE) will serve as our primary investment vehicle in real estate, private equity (startups), equities, and bonds. I will gradually roll most of our personal investments into this LLC. It is currently a sole proprietorship, but in the future it could expand to become a full-fledged private equity firm. I’m currently working on a business plan to turn it into a multi-partner firm. I consider this my hobby now, but I also want to make sure that if or when we jump off this international merry-go-round I’ll be able to do something I enjoy doing. I dread having to jump back into the private sector working for a company doing a job I don’t really like. There’s no better job for me than the one I’m doing now.
I waited to pursue incorporation because I thought it would be difficult to incorporate, but it’s surprisingly easy to do. The firm’s address in Houston, Texas offers us a virtual presence in the United States. The LLC will actually be incorporated in the State of Delaware, where more businesses incorporate than any other. Why incorporate? There are actually many reasons, but here are a few: http://www.corporate.com/should-i-incorporate.htm. I used another company to incorporate, so that’s not a sales pitch for corporate.com. Research your options if you decide to incorporate. Some are cheaper than others. You can do it for a few hundred dollars. Make sure though that you have a reason to incorporate–that you have enough assets to justify incorporation.
I was inspired to incorporate by Steve Feinberg, who founded Cerberus Capital Management. Founded in 1992 with $10 million, Cerberus’ holdings in 2006 were approximately $24 billion. If it were a public company, it now would be one of the largest companies in the U.S. Is incorporating about getting rich? Of course, building wealth is a factor, but more than that, it’s about finding fulfillment in doing the best job you can at something you love. Incorporating provides you more benefits than being unincorporated if you have a sizeable portfolio. I already have another full-time job, and I will do the best job that I can at that job, but I also enjoy investing and am intent on maximizing my investments’ potential returns. It’s wholly possible to succeed at private equity and keep your day job. You just have to be smart about your investment choices.